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May 31, 2005

Filed via EDGAR

Securities and Exchange Commission

ATTN:  Mr. Larry Spirgel

Division of Corporation Finance

450 Fifth Street, N.W.

Washington, DC  2059

  Re:

  Zomax Incorporated

  Form 10-K for the Fiscal Year
  ended December 31, 2004

  Filed March 31, 2005

  File No. 000-28426

Dear Mr. Spirgel:

Please find below our responses to your
comments as noted in your letter to Zomax Incorporated (the Company) dated May 10,
2005:

Summary of Significant Accounting Policies

Royalties.  Page 24

1.                                      Present the $2.7 million
reduction in accrued 2002 royalties, recorded in 2003, as a separate line item
in your income statement.

Our Response:  Our royalty costs are one component of the
total cost of providing optical media products to our customers and are
included in the total cost of revenue reported on the face of our income
statement.  Royalty costs represent less
than 5% of our total cost of revenue.

Rule 5-03 of Regulation S-X provides
guidance on the various line items which, if applicable, should appear on the
face of the income statement.
Specifically, Rule 5-03 (2) provides guidance with
respect to costs and expenses applicable to sales and revenues:

“Costs and expenses applicable to sales and
revenues.  State separately the amount of

(a) cost of tangible
goods sold,

(b) operating expenses
of public utilities or others,

(c) expenses applicable
to rental income,

(d) cost of services,
and

(e) expenses applicable
to other revenues.”

We believe that our disclosure of total cost of
revenue as one line item on our income statement conforms to the requirements
of Rule 5-03.

With respect to the reduction in 2003 of royalties
accrued in 2002, our 2003 results of operations included three items which we
determined to meet the definition of infrequent in accordance with such
definition as provided in APB 30 Par.  20(b).  These items were as follows:

(i)                                     The royalty adjustment referred to
above.  We have a very limited number of
royalty agreements, all of which span multiple years and, if renegotiated,
would typically be done so in advance of the expiration of any prior agreements
with no impact on past royalty amounts;

(ii)                                  A $3.0 million charge related to the
settlement of a customer claim made against our Irish entity dating back to an
alleged event that occurred prior to our acquisition of this entity in 1999;
and

(iii)                               A $2.0 million charge for severance costs related to the termination of
our former Chief Executive Officer, who co-founded the business in 1993.

Paragraph 26 of APB 30 provides guidance for the
presentation and disclosure of infrequent items as follows:

“A material event or transaction that is unusual in
nature or occurs infrequently but not both, and therefore does not meet both
criteria for classification as an extraordinary item, should be reported as a
separate component of income from continuing operations.  The nature and financial effects of each
event or transaction should be disclosed on the face of the income statement
or, alternatively, in notes to the financial statements.  Gains or losses of a similar nature that are
not individually material should be aggregated.
Such items should not be reported on the face of the income statement
net of income taxes or in any other manner that may imply that they are
extraordinary items.  Similarly, the
earnings per share effects of those items should not be disclosed on the face
of the income statement.”

We believe that our current presentation of the
nature and financial effects of these items in the footnotes as well as in several
sections of Item 7 of our Form 10-K conforms to this guidance.  We further believe that presenting only one
(e.g. the royalty item), but not all of these items on the face of the income
statement would imply some intent to limit transparency to the other
items.  Conversely, we believe that
presenting all of these items on the face of our full year income statement
will add unnecessary complexity to its presentation in the current year and all
future periods in which they are presented.

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2.                                      Disclose your policies for
accruing potential royalties and quantify in the policy footnote the amounts
expensed in each of the past three years and the total amount accrued as of
year-end for potential and any unasserted royalty obligations.  You should also disclose management’s
estimate of the amount of any reasonably possible royalty liabilities that have
not been accrued.  Please explain your
policies for recognizing royalty expenses and liabilities, and refer us to the
GAAP literature that you are relying upon.
In addition, please explain to us why the terms of the renegotiated
royalty agreement impacted the amounts accrued for other known or potential
royalties.

Our Response:  Below we have provided a revised disclosure of
our royalty accounting policy which we believe addresses a number of the points
raised in this comment.

Royalties.  We have license agreements
with several companies for the use of certain CD and DVD manufacturing
technology we use in our business.  We do
not necessarily have agreements with every patent holder that may assert or has
asserted a claim to royalties.  Our
royalty costs are accrued and charged to cost of revenue based upon the terms
of our royalty agreements and, in accordance with the provisions of FASB
Statement No. 5, “Accounting for Contingencies” and FASB Interpretation No. 14,
“Reasonable Estimation of the Amount of a Loss, an interpretation of FASB
Statement No. 5”, our assessment of the likelihood that other royalty claims
may be asserted against us.  Royalty
expense included in cost of revenue was $5.9 million, $2.2 million and $7.2
million in our fiscal years 2004, 2003 and 2002, respectively.

In the fourth quarter of 2003, we completed
negotiations with one of the major patent holders resulting in the signing of a
revised royalty agreement that retroactively reduced the royalties payable to
this patent holder.  These negotiations,
which had been previously disclosed in our 2002 Form 10-K, began in
2002.  While we were hopeful from the
start of our negotiations that we would achieve a retroactive application of
the reduced royalty rates, this was not guaranteed and, in our judgment, it was
not appropriate to recognize the benefit of the potentially reduced rates until
the execution of a final agreement.  Upon
signing the new agreement in the fourth quarter of 2003, we recorded a benefit
to cost of revenue related to these reduced rates totaling $4.8 million.  We also recorded smaller adjustments to amounts
previously accrued for other known or potential royalties.  This total benefit reflected a reduction of
unpaid royalties of $2.1 million accrued in the first three quarters of 2003
and $2.7 million accrued in 2002.

As noted in the revised disclosure, our policy for
accruing potential royalties is based on the provisions of FASB Statement No. 5,
“Accounting for Contingencies”, and FASB Interpretation No. 14, “Reasonable
Estimation of the Amount of a Loss, an interpretation of FASB Statement No. 5”.

With respect to disclosure of the amount of royalty
expense included in cost of revenue, we have provided such disclosure.  With respect to disclosure of the total
amount accrued at year-end for potential and any unasserted royalty
obligations, paragraph 9 of FASB Statement No. 5 states:

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“Disclosure of the nature of an accrual made
pursuant to the provisions of paragraph 8, and in some circumstances the amount
accrued, may be necessary for the financial statements not to be misleading.”

We believe presentation of the amount of such
accrual is not necessary for the financial statements not to be
misleading.  In addition, we believe that
disclosure of such amount in a public document increases the Company’s risk of
being specifically targeted by parties attempting to allege royalty claims
against us which are not meritorious.
Therefore it is our preference not to disclose this information.  We will by happy to provide this information
to the Commission in the course of direct discussions of our response if it
will assist in your assessment of our position on this point.  With respect to disclosure of the amount of
our estimate of any reasonably possible royalty liabilities that have not been
accrued, we are unable to estimate an amount, or range of such amounts.

As presented in the proposed disclosure revisions,
our policy for recognizing royalty expense and liabilities is based upon the
terms of our royalty agreements and in accordance with the provisions of FASB
Statement No. 5 and FASB Interpretation No. 14.  Royalties due under our royalty agreements
are calculated and paid quarterly, generally within 45 to 60 days after the end
of our fiscal quarter.  At the end of
each fiscal quarter we accrue such royalties based on the terms of these
agreements and initial estimates of media production during the quarter.

With respect to the fourth quarter adjustment to our
accrual for other known or potential royalties, this adjustment was not related
to the signing of our agreements.  We
have clarified this in the revised disclosure above.  This adjustment related to an agreement with
a different patent holder under which royalties are due based on a calculation
of “net selling price” of CD and DVD media.
Over the past several years, our CD and DVD media have increasingly been
sold bundled with other products resulting in our need to estimate the portion
of the total product price allocable to the media.  Accordingly, we determined that there was a
probable risk that the patent holder could disagree with the inherent
assumptions used in this calculation and a range of amounts was estimable.  Therefore, an accrual for this contingent
liability was provided for in the financial statements.

In the first quarter of 2003, we proposed to the royalty
agreement administrator to simplify the method of calculating net selling
price, effective with our calculations for the first quarter of 2003.  This revised calculation proposed the use of
market reference data on the prices of bulk, or “stand-alone” CD and DVD media,
rather than specific prices on all actual Zomax sales during the quarter.  We received verbal agreement with the
administrator to move forward with this new method; however, it was recommended
by the administrator that the formal agreement not be amended as it may have
caused undue delays and could potentially raise issues with other media
replicators with similar agreements.

Upon completing these discussions, we re-assessed
the likelihood that a future claim could be asserted against us by the patent
holder and concluded that a probable risk continued to exist on the basis that (a) historical
risk continued to exist under the old method of determining net selling price
given the aforementioned complexities of the calculation, (b) our revised
calculation of net selling price was not going to be formally documented in our
agreement and (c) the new calculation would continue to involve elements
of estimation.

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As indicated in our disclosure, our range of
estimated probable future losses associated with this risk was reduced in the
fourth quarter of 2003.  This assessment
was based on our belief that our defense to a potential royalty claim was
strengthened and the amount of our financial risk reduced, based on the
following:

a.                                       The contractual audit period under this
agreement is three years.  The decline in
media unit prices over time results in a natural decline in exposure over the
total audit period as older, higher cost years are replaced by most recent,
lower cost years;

b.                                      The patent holder’s acceptance of payments
determined in accordance with both methods could be asserted by us to be
constructive acceptance of the assumptions used in determining the payments;
and

c.                                       The continued lapse of time without
correspondence from the patent holder with regard to either net selling price
calculation;

With respect to the issue of retroactive or
prospective reporting, in our opinion our existing disclosure is not materially
misleading or in direct violation of accounting rules or regulations.  Accordingly, we are proposing that
recommendations to changes in our disclosure be made on a prospective basis
effective with our second quarter 2005 Form 10-Q.

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Note 12.  Quarterly Financial
Data.  Page 34

3.  We note that the restatement
discussed on page 36 had a material negative impact on your operating loss
and net earnings (loss) for the quarters ended in March, June and September of
2004.  As such, please file an amended
form 10-Q for each of the quarters ended March 26, 2004, June 25,
2004 and September 24, 2004.

Our Response.  We have disclosed the effects of the restatement on our
2004 and 2003 quarterly results in Note 12, “Quarterly Financial Data”, to the
consolidated financial statements as filed in our fiscal year 2004 Form
10-K.  We will restate the 2004 quarterly
financial statements in conjunction with the filing of our fiscal year 2005
Form 10-Qs.  The first quarter Form 10-Q,
as filed with the Commission on May 11, 2005, incorporates this approach,
further disclosing in detail the effects of the restatement on the 2004 first
quarter results.  It is our understanding
that this approach is acceptable; however, if the Staff disagrees, please
advise and direct us to the appropriate guidance.

The Company hereby acknowledges that it is
responsible for the adequacy and accuracy of all disclosures in its filings
with the SEC.  The Company hereby
acknowledges that Staff comments or changes to disclosures in response to Staff
comments in the Company’s filings reviewed by the Staff do not foreclose the
SEC from taking any action with respect to such filings.  The Company represents that it will not assert
Staff comments as a defense in any proceeding initiated by the SEC or any
person under the federal securities laws of the United States.

If you have any further questions or comments,
please contact me directly at 763-577-3515.

  Very truly
  yours,

  /s/ Robert
  J. Rueckl

  Robert J.
  Rueckl

  Chief Financial Officer

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